Caracas Connect, November 2016: Venezuela’s Agony Intensifies

By Dr. Daniel Hellinger, for the Center for Democracy in the Americas

To read a PDF version of this report, please click here.

  • Street Protests Growing, Threat of Political Violence Increases
  • Shortages, Humanitarian Crisis, and Aid
  • National Electoral Council Postpones Possible Recall
  • International and Vatican Mediation
  • Impact of Trump
  • Reflections on How the Bolivarian Revolution Came Undone

Street Protests Growing, Threat of Political Violence Increases

Venezuela entered the month of November teetering between a social explosion and dialogue. Tensions were especially high when, after two successful mass mobilizations in October, the opposition called for a march on Miraflores, the presidential palace, to take place November 3.

Venezuela was spared a new round of violence at the palace, at least temporarily, when opposition leaders called off the march. The cooling-off was accomplished through mediation by Pope Francis, whose efforts brought about the release of four detained opposition leaders whom the Democratic Unity Roundtable (MUD) regards as political prisoners. Still, several MUD leaders, including one of the released prisoners, wanted to go forward with the march. The truce nearly broke down on November 2, when MUD members of the National Assembly protested President Nicolás Maduro’s angry denunciation of Freddy Guevara, acting leader of the Popular Will party, as a “terrorist.” Since then, negotiations have centered on relieving the medical and food shortages, not early elections. Hardliners in the opposition sectors have vented their anger not only at President Maduro but at the MUD leadership engaged in the mediation effort.

The prospect of a march to Miraflores evoked memories on both sides of the violence and high drama of April 11, 2002, when a mass demonstration demanding the ouster of then-President Hugo Chávez confronted pro-Chávez demonstrators in front of the palace. As both sides faced off in a tense standoff, sniper fire broke out, killing 19 on both sides. Shortly thereafter, the military high command carried out a coup, but Chávez was restored two days later by loyal troops backed by mass civilian demonstrations calling for his return. Who fired the shots has never been definitively established, but in the flush of an apparent victory coup plotters spoke unguardedly of how they had hoped to spark a coup by diverting the march and provoking confrontation.

The underlying causes of the current civil and military unrest (discussed in the June edition of Caracas Connect) continue to affect Venezuelans and their attitudes toward resolving the nation’s highly polarized political deadlock. The government continues to struggle with low oil prices, protests against shortages of staple goods and food, and low public confidence in President Maduro. According to a mid-August poll by Datanálisis, which is aligned with the opposition but is also well-regarded professionally, over 62 percent of Venezuelans would vote to recall the president were a referendum to be held this year. Another poll (Hinterlaces) claims that Venezuelans overwhelmingly approve of mediation and approve of focusing on economic relief.

Shortages, Humanitarian Crisis, and Aid

The way that social conditions in Venezuela are characterized carries political implications. Some commentators, including several human rights organizations, have begun to refer routinely to conditions in Venezuela as a “humanitarian crisis.” To some, this disputed phrase denotes starvation and could serve as a pretext for U.S. intervention. The dispute over communications, however, should not obscure the larger realities. Even those reluctant to invoke the notion of humanitarian crisis have observed weight loss and difficulties finding basic foodstuffs, especially in poorer neighborhoods.

Many Venezuelans are in fact in need of aid. As has been heavily reported, many are without crucial medicines. Many cannot find food at regulated prices and cannot afford to buy their food on the black market. Parents skip meals to feed their children when they can. What used to be a compliment in a society overly fixated on physical appearance, losing weight has become an uncomfortable topic that many prefer not to mention, as it means that person isn’t able to afford food like before.

Subsidized food supplies are often diverted to middle-class neighborhoods by way of the black market, though shortages of some basic supplies are also present in higher-income areas. Perhaps the most disturbing reports have to do with acute shortages in hospitals and clinics. On November 2, the government announced that the military would be distributing medical supplies to hospitals in an effort to avoid them from being “re-routed.”

The international media has criticized the Maduro administration for its management of the economy and resistance to humanitarian aid. Most media reports continue to say that Venezuela has accepted no aid and present all outsider efforts as purely humanitarian and above politics. For example, National Public Radio carried an interview with Hannah Drier of the Associated Press, who said, “Venezuela keeps refusing to take donations that other countries are offering and is actually turning back shipments of donations that people have given in places like the U.S., not letting medicine in.” Venezuela’s government has accepted aid from China and some NGOs based in allied countries.

The government is very sensitive to allowing nongovernmental organizations to import and distribute aid directly, due in part to the role of NGOs financed by the U.S. quasi-governmental National Endowment for Democracy in carrying out the 2002 coup. In particular, the Maduro administration does not want to open the door to an international coalition of groups organized by Lilian Tintori, wife of Leopoldo López, the jailed MUD leader who is serving a 14-year sentence for speeches that the government claims have incited violent demonstrations.

Tintori and Venezuelan exile groups say they have 100 tons of medical supplies awaiting import permits from government authorities. While she and others claim that humanitarian aid should be above politics, she has also used the media spotlight to reject dialogue and to call for President Maduro’s resignation. I attempted to find ways to send humanitarian aid through channels not affiliated with Tintori and came up empty. My Google search for “Venezuela humanitarian aid” produced hundreds of links, nearly all of which directed me to a report on Tintori’s efforts. I found no links to other options.

The Venezuela-financed TeleSur network largely reflects the government’s view that shortages are part of an economic war being waged by the domestic agribusiness giant, Polar, among others. Its reports acknowledge acute hardships but also claim that Venezuelans are finding ways of coping. However, Telesur also admits that aid is needed, arguing, “When it comes from genuine sources without underlying political intentions, aid should be accepted. Likewise, efforts to improve the situation, from the government or otherwise, should be applauded. Many Venezuelans are in need of aid, whatever its source.”

A report published by Food First cites a study by Universidad Simón Bolívar professor Pasqualina Curcio, who found that in addition to government failures the current situation is attributable to longer-range patterns of food distribution and consumption, including control of food supply by a handful of agribusiness companies (Polar, in particular). Curcio found that food shortages have tended to occur at politically important moments. She cites statistics showing that average calorie consumption in Venezuela is still well above that necessary for basic food security, but she also acknowledges that averages do not necessarily reflect conditions for the most vulnerable sectors.

National Electoral Council Postpones Possible Recall

The Bolivarian Constitution was the product of a constituent assembly that articulated both the priorities of the late president Hugo Chávez and also Venezuelans’ desire for popular participation, not just representation in deciding major social and economic policies. To this end, it requires consultation with civil society, in particular with social movements, including human rights organizations, neighborhood associations, indigenous and Afro-descendent peoples, women’s movements, unions, and campesino organizations.

Though it emphasizes participation, the constitution also affirms commitment to liberal values often associated with representative democracy. Title I, Article 6 explicitly states, “The government of the Bolivarian Republic of Venezuela and of the political organs comprising the same, is and shall always be democratic, participatory, elective, decentralized, alternative, responsible and pluralist, with revocable mandates.”

In past elections and the 2004 recall referendum, and despite criticism from some opposition quarters, the CNE earned considerable international respect for its integrity in handling election-day balloting in a highly charged political context. In August 2004, the government and opposition, with the mediation services of the Atlanta-based Carter Center, first agreed on procedures for collecting signatures and then conducted the referendum, which Chávez won decisively. The CNE’s reputation for administering balloting apolitically was reinforced in December 2007 when two baskets of constitutional reforms proposed by Chávez were defeated by very narrow margins.

Supporters of the Unified Socialist Party of Venezuela (PSUV), the primary Chavista party, frequently refer to what former U.S. President Jimmy Carter said in 2012: “As a matter of fact, of the 92 elections that we’ve monitored, I would say the election process in Venezuela is the best in the world.” However, the Carter Center has also been very critical of the conduct of the campaigns and of abuse of incumbency during the October 2012 presidential election and the April 2013 election (the election won narrowly by President Maduro). In sum, while the CNE can run a good election, it lacks the ability, if not the will, to enforce campaign regulations for media, financing, and other matters.

Over the course of 2016, the prospect of a recall has once again challenged the National Electoral Council. The CNE primarily has had to interpret Articles 72 and 73 of the constitution and a law passed in 2006 to give more specific guidance on implementing these articles. Together these enumerate the rules of the game for recalling elected officials, the filing of petitions, minimum shares of the electorate who must cast ballots for recalls to be considered valid,1 the time table for implementing the voters’ decisions2 of those votes, and the order of succession should the balloting produce an effective recall3 – all of which are consequential for the procedures involved in resolving the crisis democratically.

Earlier this year, the opposition cleared the first hurdle for a recall when the CNE ruled that the MUD had collected enough valid signatures (one percent of the electorate in each of the country’s 24 states, according to the 2007 law) to move to the next stage of signature-gathering. The CNE also ruled that of 1.85 million signatures collected nationally, 605,727 signatures were invalid for a variety of reasons, in some cases involving fraud. The MUD then pressured the CNE to move swiftly to hold a recall this year. Otherwise, an opposition victory would not force a new election but would instead result in the vice president finishing out President Maduro’s term until the 2018 election.

In the second phase of second signature-gathering, the MUD would have to generate 3.9 million signatures, 20 percent of the electorate, over a three-day period at polling places supervised by the CNE. The CNE originally set October 26 through 28 as the period, but then it ruled arbitrarily that the MUD would have to get signatures from 20 percent of the electorate in each of the 24 states (i.e., not 20 percent nationally). This high barrier is not specified in the law and also seems to contradict Constitutional provisions. In addition, the CNE planned to use just 1,356 of its 14,000 voting centers as collection points, and only for seven hours per day.

Then, the CNE announced it was suspending signature-gathering altogether after courts in five states ruled in favor of a PSUV petition for annulment of the first round of signatures, claiming the process was marred by fraud and corruption. Critics of the suspension contend that since the CNE is a separate branch of Venezuela’s national government with constitutional authority over elections, it should not have affirmed the findings of state courts, which have no jurisdiction over national elections.

It is possible to stretch the language of the constitution and the enabling law to justify the CNE’s decisions. However, to do that is to deny the intent of the charter to empower the Venezuelan people to determine whether a president should be allowed to complete his term. The CNE’s decisions and Maduro’s resistance have drawn criticism not only from the MUD but from Chavista dissidents grouped in Marea Socialista (Socialist Tide). Nicmer Evans, a prominent spokesperson for Marea, sees the “death of participatory democracy” in Venezuela and warns that the CNE’s decisions would make it more difficult to recall an MUD president attempting to reverse Bolivarian achievements.

Maduro could take a lesson from Chávez. In June 2004, after the CNE announced that the opposition had collected enough signatures to trigger a recall referendum, then-President Chávez went on television to announce that he would accept the challenge. He played a videotape of his speech to the constituent assembly in 1999 in which he advocated setting the percentage of signatures needed to force a recall at 10 percent rather than 20 percent.

International and Vatican Mediation

Maduro’s hand has been considerably weakened over the past year by the loss of several allies in the region, most notably through changes in government in Argentina and Brazil. One result is increased support inside the Organization of American States (OAS) for imposing sanctions on Venezuela for alleged violations of the Inter-American Democratic Charter. The Charter calls for measures in the event of “an unconstitutional interruption of the democratic order or an unconstitutional alteration of the constitutional regime that seriously impairs the democratic order in a member state.” It takes a two-thirds majority of member states to vote to act against an alleged offender.

Article 19 of the Charter states that such an interruption or alteration by a country constitutes “an insurmountable obstacle to its government’s participation in sessions of the General Assembly, the Meeting of Consultation, the Councils of the Organization, the specialized conferences, the commissions, working groups, and other bodies of the Organization.” Last May, OAS Secretary Luis Almagro called a meeting to propose convening an investigation of conditions in Venezuela, but the measure was blocked by Venezuela’s OAS allies and others, such as Suriname and the Bahamas, which supported Almagro’s reading from the report. Human Rights Watch was among those endorsing invocation of the provisions, while supporters of Venezuela, such as Peter Bolton, in an article posted by the Council on Hemispheric Affairs, argued that those calling for action, having failed to act in other cases – citing, for example, the removal of Dilma Rousseff from office in Brazil, and the failure to condemn killings by state actors in Mexico – were hypocritical.

Tensions between Venezuela and the OAS over the Democratic Charter are longstanding. The Charter was signed in 1985 at the height of momentum toward free-trade pacts, neoliberal economic policies, and ascendance of liberal democracy. It affirmed representative democracy as the only valid brand of democracy. Social and economic rights are mentioned but do not have the same status as civil rights and elections. The Charter defines participation as a “right” and responsibility, as something that can strengthen representative democracy, but not as a fundamental characteristic of it.

Almagro burned whatever bridges might have existed between the OAS and President Maduro when he declared in June that Maduro was entirely to blame for Venezuela’s crisis. The Union of South American Nations (UNASUR) continues to actively seek mediation, but the hemispheric swing to the right has heightened tensions within that organization. Argentina’s President Mauricio Macri has threatened to expel Venezuela from the Mercosur trade association and said that conditions justify application of Article 19.

The Obama administration has imposed sanctions upon a number of Venezuelan politicians (not on the country itself), but Members of Congress and editorial pages in U.S. publications are increasingly calling for more stringent sanctions. These are not limited to circles likely to be influential in the new Trump administration. A recent article by Matthew Taylor, published on the website of the Council on Foreign Relations, calls for additional, selective sanctions on Venezuelan officials.

Impact of Trump

Voices in the Venezuelan opposition have been cautious about what a Trump presidency might mean for the country. Francisco Toro, executive editor of Caracas Chronicles, acknowledges that Trump is too unpredictable to hazard any guesses. Toro has written that Trump may follow the current policy that prioritizes promoting stability. But he also notes that Trump’s volatility might come into play should he take offense at crude government propaganda.

Jesús Torrealba, the MUD’s main spokesperson, confined himself to wishing the United States “luck” after the election. Some commentators have compared Trump to Chávez, which makes some opposition members nervous. Trump’s desire for good relations with Russia’s President Vladimir Putin also worries the opposition. Others have compared Trump to Peru’s former dictator Alberto Fujimori. For example, one commentator says, “Fujimori harnessed direct popular support to purge internal dissent and rule in an authoritarian style while not completely replacing the machinery of democratic elections in Peru. Fujimori is probably the closest analogue to Trump if people are wondering what to expect from a possible Trump presidency.”

President Maduro says said he would not be commenting on Trump’s victory and said he would not “meddle in the internal affairs of the United States.” He did not regard Secretary Clinton or Trump as likely to differ from one another in their policy toward Venezuela. He also affirmed that Venezuela would stand by Cuba, as Trump stated during his campaign that he intends to reverse Obama’s normalization policies.

At one point reports indicated that former New York City Mayor Rudolph Giuliani would be offered the position of Secretary of State. Giuliani has been aligned with hardliners in the Trump camp, but he endorsed the peace process between Colombia and the FARC rebels and also has been a partner in a Houston law firm that lobbied in Texas on behalf of CITGO, a subsidiary of the Venezuelan state oil company. Trump is also said to be considering hardliner John Bolton, United Nations Ambassador for two years during the George W. Bush administration, for Secretary of State. Still another report featured South Carolina Governor Nikki Haley, an ally of Florida Senator Marco Rubio, as a candidate for the position. The name of Senator Bob Corker (R-Tennessee), Chair of the Senate Foreign Relations Committee, has also arisen. Sen. Corker backed the Obama administration’s sanctions but has not endorsed the tougher measures sought by Venezuelan exiles.

Reflections on How the Bolivarian Revolution Came Undone

My friend and sometime collaborator David Smilde, Senior Fellow at the Washington Office on Latin America and professor of sociology at Tulane, recently wrote that the Bolivarian Revolution had come “full circle.” By that he means, “From a movement that showed how nonelite actors could use the instruments of electoral democracy to upend an entrenched elite, Chavismo has itself become an entrenched elite preventing those same instruments from upending it.”

David acknowledged in his piece, “I never considered myself a Chávez supporter—I’m too much of a classical liberal for that.” For my part, I felt that Chávez, throughout his life, was a flawed but effective leader who could be credited with reasserting sovereignty over the country’s national resources and with using that power to capture that share of the super-profits from oil which belonged to the Venezuelan people and channeling much of this windfall into significantly improving living conditions. He not only led Venezuelans to upend the entrenched elite of a “pacted democracy,” he also presided over a remarkable experiment in participatory democracy rooted in the 1999 constitution. Certainly he greatly influenced that document, but it was ultimately authored by Venezuelans searching for democracy.

One thing I found in my own survey research, published in a book co-edited with David, was that Venezuelans at the grassroots – both opposition and Chavistas – supported values of tolerance and the need for opposition. I argued that these values were not just compatible but a requirement for participatory, deliberative democracy to work. While I agree with Steve Ellner, another colleague and sometime collaborator, that the PSUV must democratize itself in order to breathe new life into the Bolivarian Revolution, I don’t share his “guarded optimism.” I see little indication that the PSUV and its leadership possess the capacity to renovate the party and practice the democratic spirit of the 1999 Constitution.

In saying this I am under no illusions about the opposition. The MUD has shown little more than a vocation for power. It has no coherent proposal for dealing with the economic crisis and it may very well tear itself apart if and when it captures the presidency. But neither has the PSUV nor any other significant political force in the country advanced such a project. The immediate challenge may be fashioning a political compromise to prevent a descent into an unthinkable abyss, but at the same time there must emerge – as happened both from below and above (in the leadership of Chávez) – a broad project of development. The Venezuelan intellectual Edgardo Lander expressed it best: “Venezuela must face its civilizational crisis.”

In my mind, the climax and “falling action” of the Bolivarian drama begins with the smashing victory by Hugo Chávez in the 2006 presidential election. The opposition’s decision to boycott the National Assembly elections the year before left Chávez and the newly formed PSUV in firm control of the institutions of state.

At that point, Chávez chose to accelerate the “motors” of revolution and he doubled down on that strategy even after he (narrowly) lost two referendums designed to amend the Constitution to facilitate that transition. Undeterred, Chávez then used decree powers and control of the Assembly to try to accomplish the same task. Until this time, the Bolivarian project had rested upon an uneasy but promising synthesis of representative and participatory democracy; afterward, at least officially, the goal was to replace representative with participatory democracy. Communal Councils would no longer be developed to democratize distribution of oil rents; they now were to become the base units to create a “Communal State” that would, at maturity, replace the traditional institutions (the Assembly, state and local governments, etc.) of liberal democracy.

Chávez came to think of himself as the indispensable leader of the Bolivarian Revolution. Although defeated in his first try, Chávez did achieve his objective of removing the Constitutional prohibition on his seeking a third term in a subsequent referendum. It was also in this period that he dissolved his earlier party and coalition to create the PSUV, which was to become a party capable of revolutionary social mobilization and electoral success.

All of this political change was occurring at a moment of extraordinarily high oil prices. Prices began to move from approximately $60 to their pinnacle of $130 by late 2013 and early 2014. Thanks to Chávez’s oil reforms, the country retained the bulk of these super-profits. They went to three purposes: To large-scale, private commercial interests to serve consumption and facilitate imports; to support social and economic programs targeted at the poorest sectors; and to experiments in 21st-century socialism, through the communal councils and through international programs such as PetroCaribe.

Rather than assess the wisdom and performance of these choices in using the oil windfall, I want to emphasize that the greatest error was the failure to recapitalize PDVSA, the state oil company. Its declining ability to produce oil efficiently at the price peak exacerbated Venezuela’s fiscal and social challenges as global oil prices inevitably fell. To this I would add the failure to build funds to hold in reserve to compensate for revenue losses as prices declined, but I want to put more emphasis on the deterioration of PDVSA, which is often neglected in attempts to understand the crisis.

Not only did PDVSA never achieve the production increases it projected in its annual reports, but production actually fell somewhat over the last decade (though not as much as international estimates say). In the face of declining extraction of light crude in older fields, production was largely shifted to heavy oil in the Orinoco region. Most of this production increase was mounted through joint ventures, with actual investments of financial capital and technology borne by foreign companies. Despite the creation of a new Bolivarian University and impressive spending on education, Venezuela, the petrostate, still does not offer a curriculum in petroleum engineering.

To make matters worse, PDVSA and the government resorted to borrowing against future production, especially relying upon agreements with China. Like the Venezuelan governments during the OPEC boom of 1974-1982, Chávez – and Maduro even more so – mortgaged future oil production to finance the oil sector and to fund subsidies going to domestic and foreign importers and social and economic programs.

An indication of the Maduro administration’s desperation to find an infusion of cash was the signing in August of a $5.5 billion and a $4.5 billion deal with several large mining companies, with at least another $10 billion in the pipeline. The new ventures will be in the ecologically sensitive interior, dubbed the “Orinoco Mining Arc.” Environmental and indigenous activists say that new mines would devastate huge tracts of land. In any event, the new accords indicate that Venezuela is about to double down on extractive industries, becoming even more dependent on the volatility of commodity prices.

Where I differ from several other analysts is in my stress on Venezuela’s failure to use its oil wealth to develop its oil industry, a high-technology business with many backward and forward linkages to the rest of the economy. It is not the failure to diversify exports, to root out corruption, or to effectively carry out import substitution that is at the root of Venezuela’s immediate economic crisis. Venezuela is and will be an oil country for the foreseeable future; the challenge is to face up to this fact and prioritize the need for a petrostate to manage its oil sector. Whether extraction is carried out by foreign, domestic, public, or private capital, the nation needs to regulate corporations that carry out this task, make sure that in times of extraordinary high prices it captures the bulk of profits, and plan effectively for their eventual fall.

I have no intention here of laying the blame for Venezuela’s woes solely at the feet of Chávez or Maduro. To do so would be to ignore the success of Chávez’s policies to capture most of the extraordinary oil profits of the last boom, as well as his commitment to channeling them toward the country’s excluded sectors, his international leadership in hemispheric diplomacy, his resistance to promotion of neoliberal trade schemes, and his other important accomplishments. But an understanding of Venezuela’s crisis today cannot ignore his errors, leadership flaws, and failure to prepare for the vicissitudes of the global oil economy. Maduro would have faced enormous challenges even if he had possessed his predecessor’s considerable leadership skills.

1When a number of voters equal to or greater than the number of those who elected the official vote in favor of the recall, provided that a number of voters equal to or greater than 25% of the total number of registered voters vote in the recall referendum, the official’s mandate shall be deemed revoked and immediate action shall be taken to fill the permanent vacancy as provided for by this Constitution and by law.

2Article 72: All … offices filled by popular vote are subject to revocation. Once one-half of the term of office to which an official has been elected has elapsed, a number of voters representing at least 20% of the registered voters in the affected constituency may petition for the calling of a referendum to revoke that official’s mandate.

3Article 233: The President of the Republic shall become permanently unavailable to serve by reason of any of the following events: death; resignation; … recall by popular vote…during the first four years of his constitutional term of office, a new election by universal suffrage and direct ballot shall be held within 30 calendar days. Pending the election and inauguration of the new President, the Executive Vice President shall take charge of the Presidency of the Republic.

In the cases described above, the new President shall complete the current constitutional term of office. If the President becomes permanently unavailable to serve during the last two years of his constitutional term of office, the Executive Vice President shall take over the Presidency of the Republic until the term is completed.

To read previous editions of Caracas Connect, please click here.